PET makers are sorting through a maze of recent pricing moves, while expanded polystyrene producers are attempting to boost prices as well.
Most PET makers — including Eastman Chemical Co., DuPont, Wellman Corp., Shell Chemical Co. and Nan Ya Plastics Corp. America — had moved a 5 cent-per-pound increase attempt for April 1 back to May 1. But all that was before KoSa Inc. of Houston surprised the market by announcing a 6 cent-per-pound hike set to take hold June 1.
KoSa had been a holdout on previous moves and its absence had weakened those attempts, said some industry sources.
``The [earlier] price increases, given everything we saw, were not warranted at that time,'' said Kevin Fogarty, vice president and general manager of KoSa's packaging resin business. ``The seasonality of the industry has picked up since then and we're seeing price pressure on feedstocks including ethylene glycol and paraxylene.''
Jim Lewis, vice president and general manager of container plastics for market leader Eastman of Kingsport, Tenn., said his firm would move its increase to June 1 as well, but said the firm had not decided what amount it would seek. DuPont, Wellman, Shell and Nan Ya had made no such moves at press time, although many industry contacts believed they each would match the June 1 date as well.
``Demand in North America and Europe has been very strong,'' Lewis said. ``But there's too much supply coming out of Asia at very low prices. Not a lot of [Asian resin] is being sold, but it's being used to keep prices down.''
North American PET prices have continued to drop, losing an additional 2 cents per pound since February, according to several buyers contacted.
The confusion surrounding pricing may have cost producers some of the momentum they need to raise prices in preparation for the industry's seasonal summer peak, which is led by sales of carbonated beverages.
``Normally [producers] raise the prices when the market's hot, but it's harder to do that later in the year,'' a Washington-based buyer said.
In EPS, top producers Nova Chemicals Ltd. of Calgary, Alberta, and Huntsman Corp. of Salt Lake City plan to hike prices by 8 cents per pound June 1.
``The major driver here is that EPS has dropped to unsustainable levels,'' Nova EPS Vice President Grant Thomson said. ``It's gotten to the point where we don't see reinvestment economics.''
Thomson blamed ``a slight oversupply'' in the market and an increase in Asian imports as additional reasons for the subpar prices.